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New Rules to Make it Harder for Banks to Close Accounts

1 Mins read

The U.K government is introducing new regulations to address the issue of banks closing accounts after disputes arise. This move comes after a conflict between Nigel Farage, the former leader of the U.K. Independence Party and a prominent advocate for Brexit, and private bank Coutts & Co.

According to a statement released by the U.K. Treasury on Thursday, banks will be required to provide an explanation and delay any decision to close an account. This aims to ensure transparency and accountability in the process. Additionally, customers will now have an easier time challenging account closures.

Farage had accused Coutts of targeting him due to his political beliefs. However, the bank had maintained that the closure of his account was solely a commercial decision. In response, the government has introduced new rules that will grant customers a 90-day notice period before their accounts are closed. This extended period will allow account holders more time to appeal against the decision.

Furthermore, under these regulations, banks will also be obliged to clearly state their reasons for wanting to close an account. This additional transparency will empower customers to effectively challenge any closures they deem unfair.

The U.K. Treasury has sought clarity on the handling of Farage’s accounts from Alison Rose, the CEO of NatWest, the parent company of Coutts according to a report by the BBC.

Previously, Farage had obtained documents that were later shared with the Daily Mail newspaper. These documents included minutes from a Coutts meeting, which cited both “commercial” reasons and concerns about reputational risk associated with Farage’s political views as grounds for terminating his account. The detailed 40-page report mentioned Farage’s involvement in Brexit and alleged connections to Russia.

These new regulations are designed to protect customers and ensure that banks do not unduly target individuals based on their political affiliations. By implementing these changes, the U.K. government aims to foster a more transparent and fair banking system.

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